The Social Costs of Working From Home

Why WFH might make you less happy

My favorite “ideologue” of the George Mason University Department of Economics is Bryan Caplan. Not only does he appeal to my taste for iconoclasm, but he backs his moral and empirical claims with insightful arguments. This is partially due to Bryan’s tendency to diversify his research with perspectives from domains outside of economics (Caplan, 2018, xiii). One such example can be found in his recent book entitled Labor Econ Versus the World in a featured essay called “The Grave Evil of Unemployment” (Caplan, 2022, p. 18); Caplan uses research from positive psychology to show that policies that create unemployment have a particularly harmful effect which cannot merely be undone with transfer payments.

Yet on further reflection, simple cost-benefit analysis grossly understates the horrors of unemployment.  We should also consider the effect of unemployment on happiness.  When workers don’t get a raise, they’re often disappointed or angry.  But when workers lose their jobs, they literally weep.  For most of us, a job isn’t only a paycheck.  A job also provides a sense of identity, purpose, and community.  Happiness research strongly supports this fact, but introspection should suffice.  Think about the shame and despair you’d feel if you were suddenly unable to support your children.

Caplan explains in the linked article “The Joy of Market-Clearing Wages that life satisfaction research indicates that being employed is an important contributor to happiness. The gains from considerable increases in income are smaller than the gains from going from unemployed to employed. It’s not so much about money as many would expect.

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